Analyst Note
| Joshua Aguilar |Nothing in wide-moat 3M’s latest results materially alters our long-term view of the firm. Management reduced its earnings guidance for full-year 2022 to $10.225 at the midpoint, but we were already modeling adjusted EPS of $10.27, below the prior bottom end of the range. We were, however, caught off guard by the reduced sales guidance. Foreign exchange is a headwind, but even the organic guidance fell 75 basis points at the midpoint. We now model at the top end of the organic sales range, which doesn’t seem like much of a stretch, but we model at the bottom end of the EPS range, which we think is the bigger hurdle. Even so, we maintain our $183 fair value estimate, because the time value of money canceled out the negatives in our model.